Collection agencies to target gas debts

By Gordon Deegan

Saturday, March 24, 2012

Bord Gáis has confirmed it has taken on four outside debt collection agencies to pursue customers engaging in "debt hopping".

In a bid to tackle the practice of customers closing their energy accounts without paying their bills, Bord Gáis has retained four debt collection firms: BCW Ireland, Arvato, Business-pro/Stubbsgazette, and Emerald Isle Collections to pursue those individuals.

A spokeswoman said "debt hopping is a serious issue facing the energy industry".

She said the decision was made to engage with third-party agencies after the movement of customers grew substantially after the emergence of new suppliers in the residential gas and electricity markets.

"The non-payment of closed accounts is an unfair practice which ultimately leads to higher costs for all customers and, therefore, the company took the decision to appoint third-party providers to help us recover this debt," she said.

"This is normal practice in the energy industry in Ireland. It is important to stress that only debt on closed accounts is passed to these agencies and only following substantial efforts to collect the debt via in-house collection processes."

Asked does the decision signal a more aggressive policy in pursuing people who do not pay their bills, she said: "The appointment of third-party agencies was made in response to a change in the environment — historically, customers moving to other suppliers without paying off their arrears was not an issue but this has obviously changed in the last three years following the entry of new suppliers into the residential gas and electricity markets."

She said: "We would only ever use third-party agencies to collect debt on closed accounts, principally where the account holder has left Bord Gáis Energy without paying their bills to move to a new service provider. As such, these are no longer our customers and therefore fall outside the credit collections process."

She said the numbers concerned are commercially sensitive "but it is a very small proportion of customers".

"In real terms the numbers of customers debt hopping has reduced somewhat since 2010 following the Commission for Energy Regulation’s introduction of debt-flagging protocol, whereby suppliers are able to flag to an incoming supplier if the customer has outstanding arrears on their account above a certain threshold [€250 for residential customers]."

The spokeswoman said the value of the contracts are confidential. "However, it is important to state that in no circumstances do we sell on the debt owed to us on closed customer accounts. The third-party agencies operate on a commission basis as is the norm for the energy industry."

Meanwhile, Bord Gáis has assisted more than 100,000 customers in arrears though repayment plans or pay-as-you-go meters in 2011.

The spokeswoman said: "We agreed 82,000 repaym-ent plans in 2011 compared to 31,500 in 2010 and installed 21,600 pay-as-you-go meters in 2011 compared to 1,260 in 2010."